Pricing Your Product
Submitted by admin on 4:56 am
You baked the pie. Now get your piece of it.
What determines the price of your completed product? Let’s consider some economic and marketing basics. First, there is a certain amount that you must charge in order to break even on your investment. Once you’ve got that figured out, there are other factors that will help you determine the best pricing strategy for your particular product. The most critical among them is perceived-value. How many competitive products are on the market? Are they all selling at the same price? Have you differentiated yourself from them? Do you have a unique selling proposition that will command a higher price?
I have a client that markets her training and recruiting programs to a small niche in the real estate industry–owners, brokers and managers. Her products are priced high by market standards, yet she sells a high volume of products. The reasons are simple: the message has high perceived-value, her product has beautiful packaging and there is very little competition! There is a belief that low-priced products aren’t as good quality. At the same time, if your product isn’t “special” enough and you set the price much higher than the competition, it will never sell.
A little marketing savvy pays off big-time.
If you are selling your products back-of-the-room (selling products to audience members after your presentation or performance), round prices up to even dollars. For example, $15 or $20 for a CD will sell more than $12.95 just because it’s easier to make change. Two-CD sets range from $25 – $40. Four-pack CD albums generally price out at $30 – $40. Six- and eight-pack CD albums usually go for around $50 – $80. Videos generally sell for $20 – $50 depending on the content and perceived value. Multiple-video albums have a wide price range and very high perceived-value. Their range (for four to eight DVD programs) is $95 – $195, again, depending on content and perceived-value. Include the tax in your price. Then take the sales tax out of your profit, instead of adding it on after (unless you are shipping to another state, then you do not need to charge sales tax). There is a mindset that the bigger the package the more people will pay for it. However, stay in tune with the economy and people’s needs â€” these will outweigh size.
Think about whom you’re selling to.
Also consider your market and demographics to best determine the price that the market will bear. For example, the education industry might not spend as much on a product as, let’s say, the real estate industry. If your target market is female, then you should consider smaller packages that easily fit into a purse. If you have a large, multi-unit, high-priced product, women will remove one CD at a time and put it into their purse anyway, and a high price might be a barrier to purchase. In this instance, you might want to package the CDs individually instead of a large multi-disk album. Or offer them both ways, with economic-pricing for the large, multi-unit package, and see which goes the fastest. Over time, you’ll learn what works best.
Interested in learning more about professional audio/video services? Contact me at 800-647-4281.
This information is taken from my book The Art of Production, which you can purchase from Amazon http://www.amazon.com/gp/product/096739967X/ref=sc_pgp__m_A37OD7TI15D03E… or you can purchase an e-book version from SmashWords http://www.smashwords.com/books/view/16020.